TexMessage

Thursday, February 7

Good morning, TexMessagers! Will the loss of Saturday mail affect you?

TEXclusive

The U.S. Postal Service’s plan to end Saturday mail delivery has a powerful ally in a key Texas congressman.

Rep. Blake Farenthold, R-Corpus Christi, the new chairman of the House subcommittee overseeing the post office, strongly supports the postal service’s plan to stop Saturday mail service beginning this August—though it will continue delivering packages—hoping to address its massive deficit.

The Postmaster General, Patrick Donahoe, made the announcement Wednesday morning, saying the move would provide $2 billion in annual savings for the agency.

“The move today by the Postal Service to end Saturday delivery is a step in the right direction,” Farenthold said. “This $2 billion a year savings will ensure that taxpayers are not left footing the bill in the future.”

The USPS’s decision goes along with what many in congress have previously proposed. The Senate passed legislation last April to address postal budget issues, including axing Saturday mail delivery. A similar bill failed to pass in the House.The $2 billion in savings will not fully address the agency’s fiscal troubles. Last year, the USPS reported a $15.9 billion deficit. The majority of that deficit was an $11.9 billion shortfall in the agency’s retiree health care plan.

These numbers are deceptive. In 2011, the USPS defaulted on its retiree health care payments, and that cost was added to 2012’s budget, doubling the $11.9 billion figure.

Further, the retiree health care system for the USPS is unlike any other government agency. In 2006, congress passed legislation mandating that the agency pre-fund all retiree health care plans. The agency must set aside $5.5 billion every year into the fund until it reaches $55 billion.

Changing customer demands have created additional challenges for the USPS, with fewer letters, but an increase in packages. Businesses’ increasing reliance on the internet explains both trends. The Post Office reported a 14 percent increase in package volume from 2010 to 2012. From a 2006 peak, it has seen a more than 25 percent decline in mail.

Not everyone in Washington has supported cutting back on mail delivery. Rep. Stephen Lynch, D-Mass., the ranking Democrat on the subcommittee overseeing the USPS, said he prefers a plan that stops the pre-funding requirements.

“The elimination of Saturday mail delivery will have a negative impact on thousands of businesses across the nation that are operating on a six day schedule,” Lynch said. “This could be a damaging policy change in a fragile economy.”